What is Usage-Based Insurance? What is Snapshot?

Snapshot by Progressive is one product that is part of the latest trend in insurance: Usage-Based Insurance.

We are often asked, “Why does my personal auto premium go up? I am a safe driver with no claims.” Well, that is because auto insurance is based on a risk pooling method whereby all drivers in a common rating segment are lumped together to determine appropriate auto rates for that segment.  What ends up happening is the safe drivers with no claims help balance the costs of the risky drivers with claims.  So it’s not just your driving history that goes into your auto policy’s rates.  In the majority, this method has worked for hundreds of years.

However, with the recent advances of technology and people’s desires to customize everything, there is a new way to approach auto insurance pricing with usage-based insurance rating models such as Snapshot*. (Snapshot is Progressive’s usage-based insurance program.) This program personalizes your insurance rate based on your actual driving. You can save money on your insurance premium for your safe driving habits. Currently, the main factors are hard braking, mileage, and time of day you’re driving.

How does Snapshot work?

Plug the Snapshot device into your car following the provided instructions. Track your driving habits through email updates sent from Progressive. Return the device to Progressive when you receive an email request from them. The email update will show exactly how your rate will change when you renew your policy. That’s all.

For more information on Snapshot, please visit Progressive’s website.

Rumor DEBUNKED

We have heard this rumor on several occasions, but it is not true!

Rumor: “Snapshot and other such devices will interfere with my hands free calling and Bluetooth.”

Answer: FALSE.

Usage-based insurance devices don’t interfere with driving ability, Bluetooth, or GPS navigation in the vehicle.

Usage Based Insurance: The latest trend in insurance

Many carriers including Progressive, Esurance, Allstate, Liberty Mutual are adopting usage-based insurance rating models. Here’s a more in-depth commentary by the National Association of Insurance Commissioners regarding usage-based insurance:  http://www.naic.org/cipr_topics/topic_usage_based_insurance.htm

Usage-based insurance appears to be the future in the personal auto insurance industry.  With today’s technological advancements, the limit for usage-based insurance is seemingly unlimited!

Not Convinced?

As of May 5, 2015, Progressive is offering a free 30-day trial of Snapshot.  Use Snapshot for the 30-day trial, and they will email us a quote to share with you.  Why not give it a try? Call us, and we will set you up!

 

*Snapshot is not currently available in North Carolina.

About Joe Popkowski